What is Estate Planning?

An estate plan is an arrangement for the use, conservation and transfer of one's wealth. The process by which an estate plan is created is called estate planning. This process involves much more than merely preparing the estate owner's Will. A well thought out estate plan concerns itself with the creation of an estate where none would otherwise exist, the increase of an existing estate to meet the needs of the owner and his family, and the preservation and protection of the estate from unnecessary taxes and costs.

In other words, estate planning basically involves trying to figure out what you have and who is going to get it in a way that meets with your personal objectives. At The Floyd Law Firm, our job is trying to figure out how best to assist and help you accomplish your personal objectives and then prepare the necessary documents to implement your estate plan.

Why Is A Will Important?

When a person dies without a Will, he is said to die "intestate" and his property will he distributed according to a formula fixed by statute. In other words, if you don't have a valid will at the time of your death, you will not have any control as to how your property is distributed. For example, if a South Carolina resident dies without a Will, leaving children, the surviving spouse would receive only one half of the estate where there is one or more than one child. If the children are under 18, the property cannot be delivered to them and a guardian must be appointed for them. If later the property is to be sold, a guardian must also be appointed for that purpose. Obviously the problems with passing property to minor children, even if that is where the property is desired to go, will create legal problems that might well involve considerable expense. These problems can be avoided with a Will.

Also of great importance to parents with minor children is the care and custody of those children upon the death of both parents. Grandparents, other family members, and godparents do not automatically receive custody of children who do not have a surviving parent. Your Will can specify the individual, as well as a guardian of your minor children. Although such a provision in a Will is not controlling, it will be of great assistance to the court in determining who will receive custody.

Is My Out-Of-State Will Good In South Carolina?

South Carolina presently has a statute that provides that if your will was properly executed in another state, it will be considered valid in the state of South Carolina.

However, it is usually desirable for a resident to execute a new will in South Carolina for several reasons. Since your out-of-state will was drawn with the laws of the other state in mind, it may well be that your will now needs to be changed in light of South Carolina law. Additionally, if you should die while a resident of South Carolina, your will would have to be probated in the South Carolina courts. The "providing of a Will" requires that a witness to the Will swear that he saw the decedent sign the Will. Since your out-of-state Will would have out-of-state witnesses, the extra time and cost of proving your out-of-state Will could be considerable.

JOINT OWNERSHIP OF PROPERTY:

Another area which we cover in our Simple Estate Planning is that of the form of ownership of property. We are often asked as to whether or not it is wiser to own property jointly or just in the name of one individual. There is no simple "yes" or"no" to that question as it depends upon the particular facts and circumstances. We review this issue with you and discuss the benefits and/or drawbacks to joint ownership.

What Happens If There Is No Will?

If there is no will, the court will direct the distribution of the estate in accordance with state law. In general, this means to the immediate family-that is, the surviving husband or wife and children. Often the state law does not reflect commonly held attitudes regarding provisions for the spouse as primary and does not provide the spouse adequate means of support. If there is no surviving husband, wife, or children, other blood relatives become entitled to the properly and in many cases the situation becomes very complicated. The law is rigid and gives no consideration to the needs or circumstances of the individual heirs. The law further designates who may administer the estate and may require a surety bond at the expense of the estate.

Is Joint Tenancy A Substitute For A Will?

Joint tenancy may be a useful method of transferring property, such as the family automobile and the family checking account, at death. In other situations, especially where tax considerations are involved, it can sometimes produce very unfortunate results. Even where joint tenancy is desirable, it does not take care of the situation on the death of the surviving joint tenant or a common disaster, so the necessity for a Will is not eliminated. Since joint tenancy property passes outside the will, having too much property in joint tenancy may frustrate the basic family estate plan reflected in the Will. Joint tenancy may also produce unexpected results when the "wrong" joint tenant dies first and has led to many disputes, including litigation, between the estate of the original owner and the surviving joint tenant as to whether the survivor's name was added as a matter of convenience or management or whether a gift was intended. A decision to put property in joint tenancy should never be made without consulting a lawyer.

May A Will Be Changed?

Yes. A Will may be modified, added to, or entirely changed at any time before your death provided you are mentally and physically competent and desire to change your Will. You should consider revising your Will whenever there are changes in the size of your estate. For example, when your children are young, you may think it best to have a trust for them so they do not come into absolute ownership of property until they are mature. Beware, if you draw lines through items, erase or write over, or add notations to the original Will, it can be destroyed as a legal document. Either a new Will should be legally prepared or a codicil signed to legally change portions of the Will.

What Is A Living Trust?

A Living Trust is revocable and is created by an estate owner during his life, often with the estate owner acting as the Trustee over Trust assets. The Living Trust can help the estate owner to avoid probate upon death -- since the estate owner has conveyed all of his assets into the Trust during his life, probate of a Will may not be necessary. When the estate owner dies, a successor Trustee is named to carry out the disposition provisions of the Trust. Living Trusts, which are revocable, are not estate tax-saving vehicles since the grantor retains control of assets placed in the Trust until his death. They are used to relieve the estate owner of management responsibilities -- a bank or other entity or person can be named as the immediate Trustee to invest all assets of the Trust when the estate owner wishes only to receive "a check in the mail" without the responsibility of managing the assets. The Trust is also used to avoid probate.

When does a Living Trust make sense?

What Is A Durable Power of Attorney?

A Power of Attorney is simply a power given to an agent by a principal to allow the agent to act on behalf of the principal. One of the problems with a Standard Power of Attorney is that the Power is valid only to the extent that the principal could have acted at the time the Power is exercised.

For example, suppose John Smith gives to his wife, Betty Smith, a Simple Power of Attorney which on its face enables Betty to act on behalf of John in respect to a wide variety of matters. Suppose further that John is then placed in a hospital and develops an incapacitating mental disability, whether temporary or permanent. Since John would not be able to contract at such a time since he does not have the required mental capacity to enter into such a contract, Betty would likewise be unable to contract for John under her Power of Attorney.

Thus, when a Power of Attorney was most needed it would have become inoperative. In such cases, the appointment of a conservator often appears to be the only alternative for managing the incompetent's estate. The procedure for the appointment of a conservator, however, can be expensive, time consuming, and unpleasant.

Unhappiness with the rule terminating or suspending a Power of Attorney upon the incapacity of the principal has resulted in statutory changes in a number of states, including South Carolina. These changes permit a Power of Attorney to continue despite the principal's incompetence, if the Power expressly provides that it survives incompetency and meets certain other statutory requirements. Because these Powers survive incompetency, they are frequently referred to as "Durable Powers of Attorney".

What does the law require in South Carolina to create a Durable Power of Attorney?

The South Carolina Durable Power of Attorney Act, which was signed by the Governor into law in 1978, does not make all Powers of Attorney durable. Only those that meet certain rigid statutory requirements will be construed as Durable Powers. The formal requirements of the statute relate to:

What Relationship Does The Agent, Often Called The Attorney-In-fact, Have With The Principal?

The Act provides that "The attorney-in-fact shall have a fiduciary relationship with the principal and shall be accountable and responsible as a fiduciary." The quoted language appears to incorporate the law applicable to fiduciaries generally into the relationship between the principal and the attorney-in-fact. Simply stated, since the attorney-in-fact acts as a fiduciary to the principal the law will charge the principal with certain responsibilities of acting reasonably and in good faith.

Who Needs A Durable Power Of Attorney?

The answer to this question might be who will become incompetent. Statistics tell us that although disability, unlike death, is not a certainty, it is far more likely to occur to the average person at any given point in time than death. For these reasons, the problem of disability demands the attention of estate planners and their clients. Ignoring the likelihood of disability may well result in a defeat of an elaborate estate plan and may cost the client money and flexibility It may be, however, that a properly drafted Durable Power of Attorney can be utilized to authorize an attorney-in-fact to prohibit various kinds of medical treatment under circumstances when the principal does not desire to receive such treatment.

What Is A Living Will?

A Living Will is a document authorized by the South Carolina Death With Dignity Act, S. C. Code Ann. §44-77-10 et. seq. Its technical name is A Declaration of Desire for Natural Death. Because the term "Living Will" can sometimes be confused with a Last Will and Testament, we will hereafter use the term "Declaration";, to describe the "Living Will." The maker of the Declaration is called the "Declarant." A Declaration authorizes the withdrawal of life sustaining treatment for the Declarant if he or she:

The Declaration deals only with those two issues and no other issues.

On the form of the Declaration, however, an election may be made to appoint an Agent to (i) revoke the Declaration or (ii) enforce it against medical personnel who might refuse to honor it.

It is optional but not necessary that an Agent be appointed in either case.

If the Declarant is in a terminal condition or a state of permanent unconsciousness and the Declarant can no longer eat or drink in the normal way, the Declaration allows the Declarant a choice to permit or not permit food and water to be administered through tubes to the Declarant's body.

If food and water are removed, a question frequently asked is whether the Declarant will suffer. In answer to that question, it should be noted that the medical profession has an obligation to relieve pain. Doctors also advise that frequently persons in terminal conditions lose their appetite and desire neither food nor water. When deprived of food and water, the human brain manufactures natural pain killers. There are also available medical techniques to administer moisture locally to relieve pain but not to interfere with the dying process. Additionally, it is possible, and a frequent practice, to provide in a Durable Power of Attorney that the Agent for the patient may require any and every form of pain relief therapy that is known, regardless of whether such therapy might actually hasten death (although not intentionally cause it).

On What Basis Are Legal Fees Charged?

The fees which we charge are based upon the work performed and the responsibility taken.

The above services will be done on an agreed fixed fee, which will be gladly quoted to you upon request. Our office will also render services in addition to the above at its usual hourly rates in the event that they are needed and requested by the client.

Due to the fact that it is difficult in estate planning to obtain sufficient information to give a meaningful estimate, we do provide a FREE estate planning consultation. At that time following the initial consultation, we will either agree on a legal fee for the work we recommend to you or you will not owe us anything for the initial consultation.

Resources

Books On Medical Decision-Making

Websites On Aging And Critical Care Issues

Articles Discussing the Moral, Ethical and Religious Issues of Medical Directives